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Nairaland Forum / Nairaland / General / Business / Profit Sharing Ratio Between Business Partners (33777 Views)
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Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 1:56pm On Sep 25, 2016 |
nero50: Thanks bro! |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:02pm On Sep 25, 2016 |
sweetilicious: Thanks a lot Sir for this novel thought to the issue at hand. |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:13pm On Sep 25, 2016 |
kaboninc: The ownership issue is to be a joint affair between both partners. The profit/equity sharing ratio is what is being considered. Thanks for chiming in on who owns the equipment stuff as partner two feels that should partner one want to be the owner of the equipment, then he should be more considerate in the sharing formula as the nature of the machinery is such that it's resale value is quite high so in the event of a fold up, partner one can sell off the machinery in a bid to recoup his loss. What do you think Sir? |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:15pm On Sep 25, 2016 |
phyllosilicate: Thanks anyways for sharing! 1 Like |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:17pm On Sep 25, 2016 |
oluwagream: Thanks for your input Sir! |
Re: Profit Sharing Ratio Between Business Partners by sisisioge: 2:18pm On Sep 25, 2016 |
kaboninc: True, long term deposits, treasury bills or those callup deposits too arent exactly readily available for liquidations without fulfilling some conditions. So which ever way, he still has a good deal here provided risk is to the barest minimal. |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:19pm On Sep 25, 2016 |
Melonny: Thanks a lot Sir for your time and contribution to this topic. I truly appreciate the gesture! |
Re: Profit Sharing Ratio Between Business Partners by kaboninc(m): 2:58pm On Sep 25, 2016 |
sisisioge: Don't you think too that the reward for investing in these instruments I highlighted above could be factored into the operating expenses of the business? For example the business pays partner 1 an interest for his investment then at the end of a period the business liquidates his 'investment' in full? Rather that 'claiming' a share of the profit. |
Re: Profit Sharing Ratio Between Business Partners by kaboninc(m): 3:13pm On Sep 25, 2016 |
4C2215131: Assets which are to be used for running the business should be bought in the company's name. Even if Partner 1 wants to buy it and use it as part of his financial contribution, it should still bear the company's name while the ownership structure is altered to reflect his investment in the business. Should the business fold up, the net realisable value after settlement of necessary liabilities could be shared according to equity contribution. Why not give Partner 1 an interest and a small percentage share of the profit - only profit declared for sharing? Or no share of the profit until after say 3 years while he enjoys interests payments spread across the three years? Partner 2 enjoys some form of allowance until after the 3 years with option to purchase shares yet not subscribed for |
Re: Profit Sharing Ratio Between Business Partners by sisisioge: 3:39pm On Sep 25, 2016 |
kaboninc: Well then, they would have to draw up an agreement where equity holders get profit according to ratio of investment. Which means they would both be rewarded according to their share, which means partner B could "claim" reward for service rendered too. After all, the business couldn't have ran itself. Note, partner B's intellectual property may fetch more value in monetary terms than A's capital investment in the labour market. By the way, I'm a girl who loves to talk non serious issues. Biko, stop quoting me...I don't talk business on Sunday. Remember what the bible says about the sabbath? ![]() 1 Like 1 Share |
Re: Profit Sharing Ratio Between Business Partners by InvertedHammer: 3:40pm On Sep 25, 2016 |
4C2215131:/ It is a business. Every equipment should be under the business name. Unless you intend to lease the equipment from a third party. If the business fails, the equipment goes into recovery process. Eg. If this is a transport business. X buys a car for the business for N2m. If after two year the business fails, do you think he can ever get N2m back considering the depreciation rate of the car? No. If he liquidates and get N500k from it. He balances his account and eats the loss/profit as the case may be. Focus on the 60/40 for now and work diligently to grow the business. If the business grows well, you may open subsidiaries that when put together may surpass the 60% he is getting. At this point, focusing on the money shouldn't be your main focus. You are the face of the company. The good thing is that if you do well, loyal and satisfied customers will follow you everywhere you go. That alone is worth more. / |
Re: Profit Sharing Ratio Between Business Partners by kaboninc(m): 3:50pm On Sep 25, 2016 |
sisisioge: That's if they would agree to this model. I would rather take the capital as 'debt' than concede almost 85% in equity of my busines . Note, partner B's intellectual property may fetch more value in monetary terms than A's capital investment in the labour market. Hmmmmm By the way, I'm a girl who loves to talk non serious issues. Biko, stop quoting me...I don't talk business on Sunday. Remember what the bible says about the sabbath? I had to quote you because am a guy who also loves to talk about non serious issues. I guess we can now start talking about non serious and non business issues. And ejoor let's leave Sabbath for sabbatarians |
Re: Profit Sharing Ratio Between Business Partners by sisisioge: 4:03pm On Sep 25, 2016 |
kaboninc: ![]() ![]() ![]() Let's just hope these two would come to equity with open hands. No need to be greedy lest someone decides to put a bullet to the other's head in the near future... Whatever their agreement, let it be documented and transparent. Or, partner A should forget the business and join the MMM wagon...there he could sleep all he wants and still makes money with 130% risk and 30% profit! Can life be any better? ![]() |
Re: Profit Sharing Ratio Between Business Partners by Melonny(m): 4:08pm On Sep 25, 2016 |
op, it would be nice if there is a partner c . the partner c should be a nominal partner( limited). |
Re: Profit Sharing Ratio Between Business Partners by kaboninc(m): 4:09pm On Sep 25, 2016 |
sisisioge: Lol. It depends on what open hands could mean Whatever their agreement, let it be documented and transparent. Or, partner A should forget the business and join the MMM wagon...there he could sleep all he wants and still makes money with 130% risk and 30% profit! Can life be any better? Hahahahahahaha... I think this is just the best idea soooo far. Lool. 30% interest per month! Damn girl! Ayam beginning to see why you don't talk business on Sundays!! ![]() |
Re: Profit Sharing Ratio Between Business Partners by Melonny(m): 4:11pm On Sep 25, 2016 |
sisisioge:lol...that can't happen. I guess partner A is risk averse. he's buying the business assets in his name.. |
Re: Profit Sharing Ratio Between Business Partners by sisisioge: 4:25pm On Sep 25, 2016 |
Melonny: Well...all will be well. |
Re: Profit Sharing Ratio Between Business Partners by sisisioge: 4:26pm On Sep 25, 2016 |
kaboninc: ![]() |
Re: Profit Sharing Ratio Between Business Partners by iyanigold: 7:11am On Sep 26, 2016 |
If there is no agreed profit sharing formula/ratio, profit will be shared equally I.e 50/50 |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:18pm On Sep 26, 2016 |
kaboninc: Thanks Sir, for your response. it is truly appreciated. |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:19pm On Sep 26, 2016 |
InvertedHammer: Again, many thanks for your input. |
Re: Profit Sharing Ratio Between Business Partners by 4C2215131: 2:30pm On Sep 26, 2016 |
sisisioge: Well said as the parties involved are individuals of high integrity (never minding money issues). Both espouse life philosophies that negate any potential do or die business scenarios. |
Re: Profit Sharing Ratio Between Business Partners by EXPORTFINANCE: 1:21pm On Jan 31, 2020 |
Investor needed to execute an export contract ...lets talk!..08077881934 whatsapp |
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